M&M Marketing & Management Notes PDF

Marketing&Management aantekeningen ================================== Management ---------- #### Management 1 A screenshot of a computer Description automatically generated **Stakeholders**= are all actors that have an interest in the\ organization and can either affect or be affect by its goals...

Marketing&Management aantekeningen ================================== Management ---------- #### Management 1 A screenshot of a computer Description automatically generated **Stakeholders**= are all actors that have an interest in the\ organization and can either affect or be affect by its goals\ decisions and actions. can affect firms decisions and actions and vice versa   #### #### Management 2 Decision making: 1. starts with defining the problem Comparison between current reality and some standard (past performance, previous goals, other organisations) 2. identify criteria 3. weighting criteria (weigh the factors with their relative creteria) 4. developing alternatives 5. analysing alternatives 6. selecting alternatives 7. implementing alternatives 8. evaluating decision Decision making errors and bias: - overconfidence - immediate gratification - anchoring effect (fixate on initial information, fail to adjust to new information later) - selective perception (ignoring opposing views, only what you want to see) - conformation bias (confirms your own assumptions) - framing bias (highlighting certain aspects while disregarding others) - availability bias (remember events most recent in memory) - representation bias (closely it resembles other events) - randomness bias (trying to find meaning in random events) - sunk costs error (forgetting that current choices can't correct the past) - self-serving bias (taking credit for successes but blaming failure on outside factors) - hindsight (falsely believing that you would have accurately predict the outcome after it is known) A computer screen shot of a website Description automatically generated **Rational model**= MUST acts rationally "Perfect world" logical and consistent choices to maximise value **Bounded rationality**= Rational decision but limited by ability to process information. Accept solutions are good enough rather than try to perfect (waste resources and time) Intuition: 1. experience based decision 2. affect initiated decisions (feelings or emotions) 3. cognitive based decisions (skills, knowledge and training) 4. values or ethics based decisions 5. subconscious mental processing ***Structured**:* Straightforward and simple (clear goal, familiar problem, well defined and complete). ***unstructured problems***: New and unusual (unclear goal, unfamiliar problem and information is ambiguous and incomplete). ***Programmed**:* Repetitive decision that can be handled using a routine approach (previous solutions) ***non-programmed decisions***: Unique and non-recurring decision that requires a custom-made approach. Procedures= series of interrelated, sequential steps -\>clear problem, clear procedure rules= explicit statement that tells what can and can't be done -\> simple to follow, ensuring consistency policies= less specific than rules more like a guideline for making decisions -\> open to personal interpretation Plan because; coordinated efforts, reduced uncertainty, reduced overlap, goals and standards Types of plans: Breadth - Strategic: Apply to the entire organisation and involve overall goals (Strategy formulation and strategy implementation) - Tactical : Specify details of how the overall goals are to be achieved Time frame - Long-term: Time frame beyond three years - Short-turn: Cover one year or less Specificity - Specific: Clearly defined, no room for interpretation - Directional: Flexible, setting general guidelines Frequency of use - Single use: One-time plan specifically designed to address a unique situation - Standing: Ongoing, providing guidance for activities that are repeated SWOT: - Strengts (activities the organisation does weel, unique resourses it has, what do we have to offer) - Opportunities (What do we expect to see. Positive trends in the external environment) - Weaknesses (activities the organisation does not well, resources it needs but doesn't possess - Threats (negative trends in the external environment **VISION** =\> What do we want to be? **MISSION** =\> Our purpose (the fundamental purpose for the existence of an organisation) **GOALS** =\> What we must achieve to be successful **VALUES** =\> Our ethical terms **OBJECTIVES**=\> Specific outcomes expressed in measurable terms **TARGETS** =\> Desired level of performance - [Corporate strategy]; specifies what businesses a company is in what it wants to do with those - [Competitive strategy]; how an organisation will compete its businesses - [Functional strategy]; strategy used in functional departments (HR, marketing, finance to support the competitive strategy. Corporate weapons: Customer service , innovation, Quality big data... Three-phase change process; 1. UNFREEZING\ It is necessary to\ "unfreeze" to move away\ from the status quo 2. CHANGING\ Once the situation has been "unfrozen",\ the change itself can be implemented 3. REFREEZING\ New situation needs to\ be "frozen" to make it\ permanent  To reduce resistance: 1. education & communication 2. participation 3. facilitation & support 4. negotiation 5. manipulation 6. coercion (to force those resisting against the change) **Bounded rationality**= decisions limited by human capacity to absorb and analyse information #### Management 3  **Innovation**= is the successful implementation of a novel idea in a way that creates compelling value for some or all of the stakeholders - **Minor adjustments**= "cosmetic changes" - **Incremental improvements**= Improve on something that already exists, but expand opportunities and solve existing problems → continuous quality improvement - **Disruptive / radical innovations**= create new players and markets while marginalising old ones, Game changers → dramatic value for those who successfully implement and adapt to the innovation Types of innovations ([4 P's]): 1. **Product/service** innovation;\ [Improvements] of an existing product/service or a completely new product/service or improvements in its design and/or functional qualities\ \>\> Often new sources of revenue 2. **Process** innovation;\ [Changes] in the ways in which they are created and delivered\ \>\> Often cost-optimisation 3. **Position/marketing** innovation;\ Improvements in the marketing of an existing product/service 4. **Paradigm** innovation;\ Changes in established market conventions associated with the creation of radically [new markets] **SMALL** ORGANISATIONS; Play a significant role in introducing radical, disruptive [innovation]. Can develop an innovation and move to [market quicker] **LARGE** ORGANISATIONS; Significant [resource advantage]. Can absorb high costs much better; also usually have a higher lending capacity Creativity measures: **Conceptual** **fluency**= Able to produce many ideas\ **Mental** **flexibility**= Adept at thinking\ **Originality**= Able to produce atypical responses to problems\ **Suspension of judgment**=Do not analyse too quickly\ **Impulsive**= Act impulsively to an idea, expressing "gut feeling"\ **Anti-authority**= Always willing to challenge authority\ **Tolerance**= High tolerance threshold towards the ideas of others Echo chamber= when people surround themselves with people who think the same so their dominant logic is reinforcing\ → Ideas that are commonplace for one group might spark inspiration for another - **Tacit** knowledge: embedded in people's minds and activities - **Explicit** knowledge: stated in verbal communication or documents #### Management 4 **Entrepreneurship**= Process of capitalising on opportunities by starting new businesses for the purposes of changing,\ revolutionising, transforming or introducing new products or services Entrepreneurs create **entrepreneurial ventures (EV**)= Organisations that pursue opportunities, are characterised by innovative practices\ and have growth and profitability as their main goals Types of entrepreneurs: 1. **Opportunity-based**: Starts an EV to pursue an opportunity 2. **Necessity-based**: Start out of necessity, such as job loss 3. **Serial**: Sold/closed a business, founded another one, sold/closed that one,.. 4. **Portfolio**: Builds a portfolio of additional businesses A **social entrepreneur** seeks out opportunities to improve society by using\ practical, innovative and SUSTAINABLE approaches While [Smaller] businesses tend to react by [innovating], [Larger] companies often react by [downsizing], concentrating or subcontracting Human Resource Management (HRM)= Strategic approach to managing people effectively to achieve organisational goals A computer screen shot of a pie chart Description automatically generated Environmental influences on HRM; 1. Economic conditions affecting hiring and budgets 2. Technological advances requiring new skills and enabling remote work 3. Demographic shifts, e.g. aging workforce 4. Laws & regulations, e.g. anti-discrimination laws Key laws in HRM include Civil Rights Act, Americans with Disabilities Act, Occupational Safety and Health Act **Diversity** encompasses [race, gender, age], and [cultural] background **gig economy=** contingent freelance work **Business angel equity finance**: provides initial seed money for startup businesses, usually in exchange for ownership equity in the company. - There are no interest or capital repayments - It is only available to growth businesses - You lose some ownership of the business **Overdraft**= a temporary loan that allows bank customers to keep paying bills even after the account is empty. (Working capital (debtors and stock)) #### Management 5 Work **specialization** = Dividing work activities into separate job tasks; also called **division of labour** **Diseconomy**= an economic disadvantage such as an increase in cost arising from an increase in the size of an organization **Vertical devision** of labor in firms =\> **Delegation**\ = Transfer of decision-making authority from a higher-level to a lower-level organizational unit (department, position) in the firm - **Functional structure** is an organizational structure where employees are grouped together according to their [area of] [specialization] - **Divisional structure** is an organizational structure where the organizational functions are [grouped together] into divisions depending on product, service, market, or geographies 6 key elements of organizational design: 1. Work specialization 2. Departmentalization 3. Authority & Responsibility 4. Span of control 5. Centralization & Decentralization 6. Formalization  **Simple structure** =\> has low departmentalization, wide spans of control, authority\ centralized in a single person, and little formalization A screenshot of a computer Description automatically generated **Authority** =\> The rights inherent in a managerial position to give orders and expect the orders to be obeyed **Responsibility** =\> When receiving authority employees must also have\ corresponding responsibility to perform and must be held accountable for this performance **Power** =\> Refers to an individual's capacity to influence decisions. Power is a three-dimensional concept, Power is made up of both, one\'s vertical position in the hierarchy and one\'s distance from the organizations\' power core - Legitimate power= Power based on one's position in the formal hierarchy - Reward power= Power based on the ability to distribute something that others value - Coercive power= Power based on fear - Expert power= Power based on one's expertise, special skill, or knowledge - Referent power= Power based on identification with a person who has resources or traits **Span of control** =\> The number of employees a manager can efficiently and effectively supervise, depends on contingency variables  +-----------------------------------+-----------------------------------+ | Pros of greater decentralization\ | Pros of greater centralization\ | | =\> The degree to which | =\> The degree to which decision | | lower-level managers provide | making takes place at upper\ | | input or\ | levels of the organization. | | actually make decisions. | | +===================================+===================================+ | - Relief for superiors =\> | - Better coordination of | | faster and better decisions | different company areas and | | | decisions | | - Higher quality of decisions | | | (if decentralized know-how is | - Better assessment of the | | required!) | consequences of decisions | | | (e.g. with regard to the\ | | - Increase in employee | company\'s liquidity) | | motivation\ | | | and job satisfaction | - Higher quality of decisions | | | (if central know-how is | | | required!) | | | | | | - Avoiding excessive demands on | | | employees | +-----------------------------------+-----------------------------------+ **Formalization** =\> Refers to how standardized an organization's jobs are and the extend to which employee behaviour is guided by rules and procedures Contemporary organizational design: 1. **Team** structure =\> Is a structure in which the entire organization is made up of work teams that do the organization's work 2. **Matrix** structure =\> Is a structure that assigns specialists from different functional areas to work on projects who then return to their areas when the project is completed 3. **Project** structure =\> Is a structure in which employees continuously work on projects. As one project is completed, employees move on to the next project. 4. **Boundaryless** structure =\> Is a structure not defined by or limited to artificial horizontal, vertical, or external boundaries 5. **Learning** structure =\> Is a structure in which employees continually acquire and share new knowledge and apply that knowledge. Staghes of group development: 1. Stage 1: [Forming]\ - Confusion\ - Uncertainty\ - Assessing situation\ - Testing ground rules\ - Feeling out others\ - Defining goals\ - Getting acquainted\ - Establishing rules 2. Stage 2: Storming\ - Disagreement over priorities\ - Struggle for leadership\ - Tension\ - Hostility\ - Clique formation 3. Stage 3: Norming\ - Consensus\ - Leadership accepted\ - Trust established\ - Standards set\ - New stable roles\ - Co-operation 4. Stage 4: Performing\ - Successful performance\ - Task-roles\ - Openness\ - Helpfulness\ - Delusion, disillusion and acceptance 5. Stage 5: Adjourning\ - Disengagement\ - Anxiety about separation and ending\ - Positive feeling towards leader\ - Sadness\ - Self-evaluation  **Social loafing**= Deliberate, mostly hidden performance reduction in connection with a decrease in the motivation of the employees of a team" Global Teams drawbacks: - communication problems - Mistrusting team members - Stereotyping #### Management 6 **Organisational culture**= Web of unspoken, prevalent norms, basic beliefs and assumptions about the "right" way to behave "How it is around here" A screenshot of a computer Description automatically generated 4 Organisational cultures 1. **Power** Culture\ Power is concentrated on\ the centre (manager) 2. **Role** Culture\ Clearly defined roles &\ procedures (bureaucracy) 3. **Task** Culture\ Assigning people &\ resources most efficiently 4. **Personal** culture\ Management and power is\ shared -- freedom is key Entrepreneurial vs bureaucratic cultures: --------------------------------------------------------------------------- **Entrepreneurial** **Bureaucratic** -------------------------------------- ------------------------------------ Focus on results\ Focus on process\ Creating value through innovation Seeking stability and status quo Hands-on management\ Tight control\ Commitment & personal responsibility Clear hierarchy & responsibilities Open systems\ Closed systems\ Freedom to grow and to fail Failure might be punished ---------------------------------------------------------------------------  **feminine virtues**= cooperation & modesty **masculine** **virtues** = achievement & competition Changing culture 1. Obtain leadership commitment 2. Select groups for interviews 3. Choose appropriate setting for interviews 4. Explain purpose of meeting 5. Explain how to think about culture 6. Get descriptions of artifacts 7. Identify intangible activities and routines 8. Identify shared assumptions 9. Identify cultural aids and hindrances 10. Report assumptions and joint analysis Personality - Big Five (**OCEAN**): - Openness to experience (Imaginative -- artistic -- intellectual) - Conscientiousness (Responsible -- dependable --persistent -- achievement-oriented) - Extraversion (Sociable -- talkative -- assertive) - Agreeableness (Good-natured -- cooperative -- trusting) - Neuroticism (Nervous -- depressed -- insecure) **Motivation**= The will and desire that a person has to engage in a particular behaviour or perform a particular task - **Extrinsic** motivator= Reward that is given by somebody else,\ e.g., the employer, Example: pay, company car, promotion - **Intrinsic** motivator= Reward that a person senses for\ themselves, rather than it being provided\ by somebody else\ Example: sense of achievement\ (comes more from within=\> much more powerfull) Pay as a motivaton: - Sole motivator for otherwise lazy and unmotivated workers - Can be used as a reward -- or its withdrawal as a punishment - At lower levels, it is needed to survive -- at higher levels\ intrinsic motivators have a bigger effect - Must be provided in sufficient amounts to avoid dissatisfaction - Employees can use it to compare themselves (indicator of status) Hierarchy of Needs (PSaSoESe) 1. (most immediate need) **Physiological** needs\ food -- water -- warmth 2. **Safety** needs\ safety -- security 3. **Social** belonging\ (intimate) relationships -- friends -- need for affection 4. **Esteem** needs\ prestige -- recognition -- self-respect 5. **Self-actualisation**\ achievement of ultimate potential and creativity ): Theory **X** = Workers have little ambition, Want to avoid responsibility & Need to be closely controlled (: theory **Y**= Workers want to work, Take responsibility & Will direct themselves #### Management 7 The Fiedler contingency model= Effective group performance depends on properly matching the leader's style and the amount of control and influence in the situation  **Relationship** oriented leader style: Leader primarily interested in good personal relations with co-workers **Task** oriented leader style: Leader primarily interested in productivity and getting the job done - **Leader-member** relations:\ Degree of confidence, trust and respect employees have for their leader - **Task** structure: Degree to which job assignments are formalized and structured - **Position** power: Degree of influence a leader has over activities such as hiring, firing, discipline, promotions and salary increases three contingency dimensions that defined the key situational factors in [leader] [effectiveness]: **Leader-member relations, task structure and position power** Situational-Leadership-Theory (SLT) -- Influence Behaviors S1: Telling =\> The leader defines\ roles and tells people what, how, when, and where to do.\ \*S2: **Selling** =\> The leader provides both, directive and supportive behavior.\ \*S3: **Participating** =\> Leader and followers share in decision making; the main role of the leader is facilitating and communicating.\ S4: Delegating =\> The leader provides little direction or support +-----------------------------------+-----------------------------------+ | **Transactional leaders\ | **Transformational leaders** | | ** | | +===================================+===================================+ | Guide/motivate followers\ | Stimulates/inspires\ | | to work towards\ | (transforms) followers to\ | | established goals | achieve extraordinary\ | | | outcomes | +-----------------------------------+-----------------------------------+ | Offering reward for\ | Focus on the four 'I's' of\ | | achieving those goals | transformational leader-\ | | | ship: | | | | | | 1. Intellectual Stimulation | | | | | | 2. Individual Consideration | | | | | | 3. Inspirational Motivation | | | | | | 4. Idealized Influence | +-----------------------------------+-----------------------------------+ | Fits if employees are self-\ | Fits in organizations\ | | motivated and can work\ | where the goals cover\ | | without the inspiration of\ | the development of\ | | a manager | employee talents | +-----------------------------------+-----------------------------------+ | Fits if specific sales or\ | Fits when developing\ | | production goals have to\ | innovations | | be hit. | | +-----------------------------------+-----------------------------------+ | Is found in rather\ | Is often found in more\ | | hierarchical organi-\ | organic structures | | zational structures with\ | | | line authority in place | | +-----------------------------------+-----------------------------------+ a. **Charismatic** **leaders**: 1. Have a vision 2. Have ability to articulate that vision 3. Have willingness to take risk to achieve that vision 4. Have sensitivity to environmental constraints and follower needs 5. Have behaviors that are out of the ordinary b. **Visionary leaders**: The ability to create and articulate a realistic, credible, and attractive vision of the future that improves on the present situation **Credibility**= the degree to what followers perceive someone as honest, competent and able to inspire **Trust**= The belief in the integrity, character, and ability of a leader. Regulatory elements: - The event that triggers a communication - Communication process - Sender & Receiver of information - Communication channel - Communication content A screenshot of a computer Description automatically generated The four-sides model by Schulz von Thun: +-----------------------+-----------------------+-----------------------+ | 1. factual | | | | information | | | +-----------------------+-----------------------+-----------------------+ | 2. Appeal | | | +-----------------------+-----------------------+-----------------------+ | 3. Relationship | | | +-----------------------+-----------------------+-----------------------+ | 4. Self-revelation | | | +-----------------------+-----------------------+-----------------------+ A. **purpose**: the purpose of the collaboration between the parties involved B. **definition**: which information must remain confidential, and which is public C. **consequences**: what happens if one of the parties breaches the agreement, for instance a fine or dismissal (in case of a fine, the amount of the fine) D. **duration**: for how long the information must be kept confidential E. **permissions**: to what purpose the parties involved may use the information F. **validation**: signatures of the parties involved Code of Ethic and Business Conduct Statement: - Statement should be [precise] - Statement should be [comprehensive] - Statement should be written for the reader ([no complicated jargon]) - Statement should use [active] rather than passive voice? - Statement should [fit well] to the organization #### Management 8 **Control**= Management function that involves monitoring activities to ensure that they're being accomplished as planned and correcting any significant deviations  Timing of control: 1. During Input-\> **Feedforward control**; Predicts problems 2. During Processes-\> **Concurrent control**; Corrects problems as they happen 3. During Output -\> **Feedback control**; Corrects problems after they occur operations management Strategic [success] parameters based on **Balanced Scorecard (BSC**): - Satisfied Owners - Enthusiastic customers - Effective processes - Motivated employees **Balanced Scorecard (BSC):** - **Financial perspective;** \- Includes the classic financial indicators\ - Economic success control\ - Information for investors\ - Results of the company\'s performance\ - Strategic goals: Secure liquidity, stability, profitability\ - Example of measures: [Sales, return on equity, cash flow or contribution margin] - **Internal Business Processes;** \- Differentiation between different processes, e.g. operational processes, innovation processes, customer service processes\ - Strategic goals: Achievement of internal process and production goals\ - Examples of indicator/ measures: [Process quality, process lead time, number of pieces per hour] - **Customer**; \- Strategic goals regarding customers and market segments: Increase in market share, improve customer satisfaction etc.\ - Consideration of customer requirements\ - Example of customer satisfaction measures: [On-time delivery, high quality, fast service, 95% compliance with deadline, use of reminder function, ticketing system for customer inquiries] - **Learning & Growth;** \- Key figures for achieving the (long-term) survival goals of the organization\ - Consideration of company potentials that influence competitiveness\ - Continuous further development and improvement of: systems, employees,\ processes, growth\ - Examples of measures: [Sales ratio of new and old products, fluctuation of high performing employees] **Operations management**= the design, operation, and control of\ the transformation process(value adding) that converts [inputs into outputs] **Value chain**: Every firm is a collection of activities that are performed to\ design, produce, market, deliver, and support its product. All these activities can be represented using a value chain ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- **Value Chain Management** **Supply Chain Management** ------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------------------------------------- the process of managing the sequence of activities and information along the [entire]\ Is concerned with the management and control of the flows of material, information, and finances in supply chains so as to provide the desired levels\ value chain of service to supply chain customers in most profitable way. **Externally** oriented **Internally** oriented Focusses on both, [incoming materials] to the organization and [outgoing products] and services Focusses on efficient flow of\ incoming materials ([resources]) [Effectiveness] oriented and aims\ [Efficiency] oriented and aims to\ to create the highest value for\ reduce costs and make the\ customers organization more productive ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- System audit= Assessment of the effectiveness\ of the entire system Process audit= Assessment of process capability and process effectiveness.\ Review of the specification and verification documents Product audit= Control for product quality requirements Marketing --------- #### Marketing 1  ------------------------------------------------------------------------------------ **Needs**: basic human requirements **Wants**: needs directed towards specific objects that might satisfy the need **Demands**: wants for specific products backed by an ability to pay - The market (i.e., potential customers) - The value proposition (i.e., why would your potential customers be interested?) - The marketing tactics (product, service, brand, distribution, incentives, communication, price) Mission statements: Focus on a limited number of goals\ Stress the company's major policies and values\ Define the major competitive spheres within which the company will\ operate\ Take a long-term view\ Are as short, memorable, and meaningful as possible **SBUs**= Strategic Business Units; - It is a single business or collection of related businesses, that can be planned separately from the rest of the company\ It has its own set of competitors\ It has a manager responsible for:\ Strategic planning\ Profitability **Intensive growth**: improving existing businesses (Ansoff's growth matrix) A screenshot of a computer Description automatically generated\ **Integrative growth**: vertical/horizontal integration within the industry\ **Diversification growth**: outside the present businesses/industries **Market Penetration**: Enhancing its market share in existing locations through promotions, loyalty programs, and store renovations. **Product Development**: To keep attracting existing customers, introduce new beverages and food items, such as a pumpkin spice latte and plant-based menu options. **Market Development**: Opening new stores in international markets, such as China, to reach new customer segments **Diversification**: Launching new business lines on new markets (such as Starbucks Reserve Roasteries and Starbucks Reserve coffee products, to cater to (different) niche markets.) **Marketing channels**= Distribution channels, Communication channels & Service channels 5 C's of marketing: 1. Target customers 2. Collaborators 3. Competitors 4. Company 5. Context or climate 7 company's tactics (marketing mix): 1. Product -- ownership 2. Service -- non-ownership 3. Brand -- differentiate from competing products/services 4. Price -- monetary charge that customers and collaborators incur to receive 5. Incentives -- tools to increase benefits and reduce costs 6. Communication -- apprises target customers of the specifies of the offering 7. Distribution -- encompass the channel(s) used to deliver #### Marketing 2 A screenshot of a computer Description automatically generated Economic: Purchasing Power\ Income Distribution\ Savings Rate\ Debt\ Credit Availability Social: **Fad**: unpredictable and short-lived and without social, economic, and political significance (fidget spinner, tiktok dances etc)\ **Trend**: a direction or sequence of events that has momentum and durability; the shape of the future is revealed, and many opportunities are provided (going plant based)\ **Megatrend**: large social, economic, political and technological change that is slow to form, and once in place, they influence us for some time---between seven and ten years, or longer (EY) (vergrijzing) Technology: Pace of Change\ Opportunities for Innovation\ Varying R&D Budgets\ Increased regulation of Change Environmental: Grand challenges:\ Anti-pollution pressures\ Increased energy costs and use\ Government protections\ Shortage of raw materials **MIS, marketing information system**= consists of people, equipment, and\ procedures to gather, sort, analyse, evaluate, and distribute needed,\ timely, and accurate information to marketing decision makers. Relies on; Internal company records, Marketing intelligence activities & Market research How to set up a MIS: ▪ What decisions do you regularly make?\ ▪ What information do you need to make these decisions?\ ▪ What information do you regularly get?\ ▪ What information do you want that you are not getting now?\ ▪ What information would you want daily, weekly, monthly, yearly?\ ▪ What special studies do you periodically request?\ ▪ What newsletters, briefings, blogs, reports, or magazines would you like to\ see on a regular basis?\ ▪ What topics would you like to be kept informed of?\ ▪ What data analysis and reporting programs would you want?\ ▪ How to improve your MIS? Example of good marketing research:\ [Scientific Method]: Nike tests hypotheses about consumer behaviour through controlled\ experiments and data analysis.\ [Research Creativity]: Nike used creative methods like ethnographic research to develop\ innovative products, such as Flyknit technology.\ [Multiple Methods]: They combine surveys, focus groups, biometric studies, and digital\ analytics for a holistic market understanding.\ [Interdependence]: Nike integrates analytics and consumer data to make informed decisions and predict trends.\ [Value and Cost of Information]: They balanced the cost of research with its long-term\ value.\ [Healthy Skepticism]: Nike continuously validates findings through testing and real-time\ feedback.\ [Ethical Marketing]: The company promises ethical use of customer data and promotes\ positive social messages, which in turn improves trust and brand loyalty. **Market demand** for a product is the total volume that would be bought,\ in a defined geographical area\ in a defined time period\ in a defined marketing environment\ under a defined marketing program **Market forecast**= is the market demand at the level of marketing\ expenditure that will actually occur\ **Market potential**= is the limit approached by market demand when\ industry marketing expenditure approaches infinity [Maslow\'s needs:] 1. Self-actualization needs 2. Esteem needs 3. Social needs 4. Safety needs 5. Physiological needs A life style is= A person\'s pattern of living in the world as expressed in activities, interests, and opinions **Lexicographic choice heuristic**= mental shortcut used by consumers when making purchasing decisions. It involves evaluating alternatives based on the most important attribute first, and then using subsequent attributes to break ties if needed. **Conjunctive choice heuristic=** the consumer sets a minimum acceptable cutoff level for each attribute and chooses the first alternative that meets the minimum standard for all attributes **Elimination-by-aspects choice heuristic**= decision-making strategy that people often use when they are faced with a complex choice. It involves breaking the decision down into smaller, more manageable parts, or "aspects," and evaluating each aspect separately before making a final decision. #### Marketing 3 **Quality**= is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs. **Customer's lifetime value** = Company profit margin (CPM %)/100 (%) x Annual customer revenue (CR) x Average number of loyal years (LY) **Customer equity** = the sum of the lifetime value of all customers **Customer Relationship Management** (CRM)= The process of carefully managing\ detailed information about individual customers and all customer "touchpoints" to maximize loyalty. (for cars of Amazon etc)  B2B= business to business B2C= business to consumer A screenshot of a computer Description automatically generated Descriptive research= the purpose of the research is to quantify demand Available market= The set of consumers who have interest, income, and access to a particular offer #### Marketing 4 1. Identify and profile distinct groups of buyers (market segmentation) 2. Select one or more market segments to enter (market targeting) 3. For each, establish and communicate benefits of offering (market positioning)  A screenshot of a computer Description automatically generated  Grassroots marketing is an example of micro marketing at the level of: Local areas Segmentation of consumer markets requires= Differences in descriptive characteristics **and** differences in behavioural considerations A screenshot of a computer Description automatically generated A Brand= A name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. Benefits of a band: 1. Improved perceptions ofproduct performance 2. Greater loyalty 3. Less vulnerable to competition 4. Less vulnerable to crises 5. Larger margins 6. Inelastic (doesn't influence much) consumer response to price increases 7. Elastic (influences much) consumer response to price decreases 8. Greater trade cooperation 9. Increase in effectiveness of marketing communication 10. Licensing opportunities 11. Brand extension opportunities Positioning= The act of designing a company's offering and image to occupy a\ distinctive place in the minds of the target market First step in brand positioning 1: Competitive frame of\ reference - Identify the target market & competitors: category membership\ Category Benefits\ Compare to exemplars\ Product descripto Second step 2: Points of difference (POD)/ parity (POP) (in common with other brands) - For the POD: Attributes or benefits that consumers strongly associate with a\ brand, positively evaluate, and believe they could not find to\ the same extent with a competitive brand (a brand association of benefit that differentiate the company from its competitors) - For POP: Attribute or benefit associations that are not necessarily unique to the\ brand but may be shared with other brands (an association that is shared with other brands) Last step 3: Brand mantra (feeling - Short phrases that capture the essence or spirit of the brand\ positioning (for internal use) Brand Mantra Criteria:\ Communicate\ Simplify\ Inspire Customer-based Brand Equity= The differential effect that brand knowledge has on\ consumer response to the marketing of that brand The monetary value of a brand is called brand equity. The most common method of measuring brand equity= cost approach, market approach & finacial approach Drives of brand equity: - The brand logo - Brand advertising - The country of origin - Incorrect Response - Employees  Classification of 'Brands': - By brand-owner\ -- Manufacturer\ -- "Private label" (trade or store brands) - By distribution & marketing support\ -- A-brands (national or global, widely advertised and well known)\ -- B/C-brands (regional or local, less supported or not supported) - By range of products\ -- Umbrella brand (different product categories, e.g. Samsung)\ -- Brand family (product range, e.g. Bertolli)\ -- Sub brands (Renault Megane) - Products with no brand name are called "Generic products" #### Marketing 5 Six Types of Defense Strategies to [stay **Market leader**]: \(1) Occupying the most desirable\ market space in consumers' minds\ (2) Erect outposts to protect a weak\ front or support a possible\ counterattack\ (3) More aggressive maneuverer to\ attack first, keeping everyone off\ balance\ (4) Meet the attacker frontally and hit\ its flank\ (5) Stretch its domain over new\ territories through market branding\ and diversification\ (6) Give up weaker markets and\ relocate resources to stronger ones General attack strategies for **[Market challenger]** ( who want to become Number One): (1) Attacking the opponent head on in terms\ of the marketing tactics: - Lower-priced or discounted products\ Product innovation\ Improved services\ Wider assortment\ Distribution innovation\ Promotion innovation \(2) Finding gaps that are being created by\ shifts in markets\ (3) Launching an offensive attack on many\ fronts (also partnering with other companies)\ (4) Focusing on easier, smaller markets that\ the leader does not bother with\ (5) Small attacks, both conventional and\ unconventional that are used to harass a\ competition **[Market follower]**: copies/clones/Counterfeite **[Market-Nicher Strategies]**: Target small, profitable segments & Achieve higher margins Profit Life Cycles: 1. **Introduction stage** Slow sales growth, negative profits Marketing Strategies:\ 1. Inform potential customers\ 2. Induce product trial\ 3. Secure retail distribution -------------------------------------------------------------------------------- Advantage of being pioneer/the first Disadvantage of being pioneer/the first -------------------------------------- ----------------------------------------- Brand name association\ Poor new products\ Define product class\ Bad positioning\ Customer inertia\ No demand yet\ Producer advantages Product development costs -------------------------------------------------------------------------------- 2. **Growth stage** Rapid sales growth; New competitors Marketing Strategies:\ 1. Improve product quality; add new features\ 2. Add new models and flanker products\ 3. Enter new market segments\ 4. Increase distribution coverage\ 5. Focus advertising on preferences and loyalty\ 6. Lower price; Attract price-sensitive buyers (economy of scale) 3. **Maturity stage** Growth slows; Weak competitors exit Marketing strategies\ 1. Market modification\ 2. Product modification\ 3. Marketing program modification 4. **Decline stage** Decline of sales and profits Marketing strategies:\ 1. Rejuvenate product\ 2. Harvest\ 3. Divest Product portfolio has a certain: - [Width] = the number of different [product lines] - [Length] = the total number of [items] in the mix - [Depth] = the number of [variants] offered for each product in the line - [Consistency] = reflects [how] [closely related] the various product line are in ed use, production requirements, distribution, etc. Product Mix Pricing: **Product-line pricing** (Canon cameras: low-priced, moderate, high-priced)\ **Optional-feature pricing** (cars: air conditioning, leather seats, etc.)\ **Captive-product pricing** (Video games: Console and games)\ **Two-part pricing** (Phone: fixed fee plus charges for extra service)\ **By-product pricing** (Beer + pulp, meat + bones)\ **Product-bundling pricing** (Bundle price for cable tv, internet and phone) **Packaging Objectives**\ 1. Brand identification\ 2. Persuade\ 3. Protection\ 4. At-home storage\ 5. Aid consumption **Service= [ ]**An act or performance one party can offer to another that is\ essentially intangible and does not result in the ownership of\ anything **[Service Characteristics:]** a. **Intangibility** = Physical Evidence & Presentation ** ** Place\ People\ Equipment\ Communication material\ Symbols\ Price b. **Inseparability** = Work Faster, Add More Service Providers & Work with Larger Groups c. **Variability** = Monitor Satisfaction, Standardize service-\ performance process & Good Hiring and Training d. **Perishability** =Matching supply & demand Demand side\ Differential pricing\ Promote nonpeak demand\ Offer complementary services\ Reservation systems\ Supply side\ Part-time employees\ Peak-time efficiency\ Increased consumer participation\ Shared services\ Facilities for future expansion industrial-goods classification:  **Materials**= The goods that enter the manufacturers products completely  ;Farm products (such as milk meat and potatoes) **Manufactured Materials and parts**= Raw material which has to be manufactured ; yarn which is used to make the cloth **Capital items**= items necessary for the functioning of the organization, and very useful to be invested in for the long term; Installations or equipment **Supplies**= Any short term goods or material which is necessary for the day to day operations or a company or businesses is termed as supplies.** **Marketed via intermediaries and not directly through companies ; Pen and paper, notepads, lubricants for automobiles... **Business services**= third party services given to businesses ; Business advisory services or Maintenance and repair services. #### Marketing 6 A screenshot of a computer Description automatically generated Common **pricing mistakes:** - Determine costs and take traditional industry margins - Failure to revise price to capitalize on market changes - Setting price independently of the rest of the marketing mix - Failure to vary price by product item, market segment, distribution channels, and purchase occasion **Price-Quality Inference=** **Reference Prices=** - Last price paid - Usual discounted price - "Fair price" - Typical price - Upper-bound price - Lower-bound price - Competitor prices - Expected future price **Price Endings=** - Left to right" pricing\ (€ 14,95 versus €15) - Odd number discount perceptions - Ending prices with 0 or 5 - Round number value perceptions  [Pricing methods:] - **Markup**= fixed percentage, known as the markup, is added to the cost of a product to determine its selling price. The markup covers the overheads and contributes to the profit of the business. - **Target-return**= strategy in which prices are set to achieve a specified return on investment (ROI). Companies using this approach calculate the price of a product by factoring in production costs, expected sales volume, and the desired profit margin. - **Perceived-Value**= price based on its perceived value. It determines how much value a customer attributes to a particular product. - Value (EDLP) - Going-rate - Auction-type New product success factors (Cooper 1999) 1\. Unique and superior product\ 2. Strong market orientation\ 3. Up-front homework\ 4. Sharp and early product definition\ 5. Cross-functional team approach\ 6. Focus: sharp evaluation and decision points\ 7. Quality of execution\ 8. Multi-stage-and-gate \"Game plan\" Roger's innovation characteristics that influence adoption: - relative advantage (+) (degree to which it is perceived to be better than what it supersedes) - complexity (-) (difficulty of understanding and use) - compatibility (+) (consistency with existing values, past experiences and needs) - trialability (+) (the degree to which it can be experimented with on a limited basis) - observability (+) (the visibility of its results) **Maximum market skimming price**= a pricing strategy in which a company starts by charging the highest price that customers will pay. Over time, the company lowers the price to reach different types of customers. Initially, the high price targets early adopters willing to pay more for a new product. As these early customers are satisfied and competitors enter the market, the company reduces prices to attract more price-sensitive consumers **Maximum market share pricing**= setting prices that yield the highest possible profit margin. Achieving this goal demands a nuanced evaluation of costs, demand, and competition while ensuring the attractiveness of prices to customers. **Survival pricing**= When prices cover only a little more than variable costs #### Marketing 7 **Distribution Channels**= Sets of interdependent organizations participating in the\ process of making a product or service available for use or\ consumption A computer screen shot of a computer screen Description automatically generated Forward Flow= Transportation and storage,\ ownership, communications Backward Flow= Ordering, payment  Role of Marketing Channel intermediaries: - Contacts - Experience - Specialization - Scale of operation A screenshot of a computer Description automatically generated 3 Channel-Management Decisions: 1. Analyze - customer **wants and needs**: Convenience, price, Product variety &\ Service backup, Shopping goals;\ Economic\ Social\ Experiential 2. Establish - **objectives and constraints**: Product characteristics 3. Identify and evaluate -- **alternatives**: Channel Alternatives\ Type of Intermediaries\ Number of Intermediaries\ Terms and Responsibilities  Horizontal Marketing Systems= a formal agreement between two or more companies of the same size and scale to collaborate and expand their marketing activities Vertical Marketing Systems= producers, wholesalers and retailers work in unison to meet their customers\' needs. It allows one company to have control over the entire process of producing and selling a product. Push and pull channel strategies Retailing= All the activities in selling goods or services directly\ to final consumers for personal, nonbusiness use Wholesaling (A jobber)= All the activities in selling goods or services to\ those who buy for resale or business use.; - Less attention to promotion, atmosphere, and - location (business customers) - Larger transactions - Larger trade area - Different regulations Market logistics planning: - Deciding on the company's value proposition to its customers - Deciding on the best channel design and network strategy - Developing operational excellence - Implementing the solution Coercive power= The ability to dispense punishments Reward power= The ability to distribute positive or negative rewards Legitimate power= Authority that comes from a belief on the part of those being influenced that the person has a legitimate right to demand conformity. Expert power= Power that comes from other's beliefs that the power-holder possesses superior skills and abilities Referent power= Influence based on identification with, attraction to, or respect for the power-holder Exclusive distribution= distributors are provided exclusive rights to sell products within a particular geographical location Selective distribution = sell products through a limited number of retailers Intensive distribution= product is distributed through all available channels in order to flood the market.  #### Marketing 8 Marketing Communications Mix: - Advertising - Public Relations and Publicity - Personal Selling - Social Media - Word-of-Mouth - Events and Experiences - Sales - Promotion - Communication Selling process Exam preparation QuestionsWrap upAssignments **The hierarchy of effects**= a theory that discusses the impact of advertising on [customers' decision-making] on purchasing certain products and brands. The theory covers a series of stages that advertisers should follow, from gaining customers' awareness to the final purchase behavior.; most useful in developing effective communications, for [Determining the communication objectives] A screenshot of a computer Description automatically generated Steps in Developing Effective Communications: 1. Identify the Target Audience: Market segments\ Usage\ Loyalty\ Brand knowledge 2. Determine Objective: - Developing brand purchase Intention - Building brand preferences - Creating brand awareness and attitude 3. Design Communications: - What to say? (Message Strategy) - How to say it? (Creative Strategy) - Who should say it? (Message Source) 4. Select Channels 5. Establish Budget: Cost-Effectiveness / Buyer-Readiness 6. Decide on Communications mix 7. Measuring Results 8. Manage Integrated Marketing Communications Methods to establish the [budget]: **Objective-and-task method**= a system in which a company allocates a certain amount of money to its marketing budget based on specific objectives, rather than choosing an arbitrary amount or basing its marketing budget on sales revenues or projections alone (best for marketing communications) **Affordable method**= setting a company\'s communications budget (including advertising) at a level the management thinks it can afford, rather than on the level of sales, profits, or the amount spent by competitors. **Percentage of sales method**= a forecasting tool that makes financial predictions based on previous and current sales data. This data encompasses sales and all business expenses related to sales, including inventory and cost of goods. **Competitive-parity method**= determines marketing budget levels by benchmarking against competitors' spending. social media as communication tools is: high \'impact\', high \'reach\' & high \'frequency\'